Over the past decade, there has been a new paradigm emerging in the American fire service. This paradigm shift is often referred to as Community Risk Reduction, or simply CRR. The genesis of this change comes from the British fire service, where in the early 2000s the central government mandated that local fire services meet challenging fire reduction targets or face substantial budget cuts. These fire reduction targets were initially dismissed as absurd by fire personnel who had seen limited success in their legacy fire prevention efforts and assumed people were going to continue to make bad choices and fires would continue to happen unabated. However, given that they were facing potentially daunting cuts, the fire services across the UK got creative. They figured out what strategies actually worked, and they started seeing substantial reductions in fires countrywide. What they originally dismissed as absurd ended up turning into a nearly 60% reduction in the total number of fires across the country and nearly a 40% reduction in primary dwelling fires[i] over the initial ten-year period. Meanwhile, during that same period, according to the NFPA’s annual fire loss reports, the number of fire incidents in the U.S. remained largely unchanged[ii].

We recently discussed the rapid proliferation of batteries in modern homes and businesses and the more worrying proliferation of fires associated with those batteries on AAIS Views. On October 12, 2023, the Fire Department for the City of New York (FDNY) hosted a one-day symposium titled, “A Conversation with the Insurance Industry About Lithium-Ion Batteries.” The intent of the symposium was to share the scope of the problem, the current state-of-the-art in mitigating these types of incidents, and a clarion call for insurers to join the fight in addressing this scourge.

AAIS hosted a virtual presentation on September 14, 2023, featuring AAIS Partner OwlSurance (formerly BizDynamics), a business unit of ValueMomentum, for a demonstration of their contractor risk product. Hosted by Stephanie Vasey, Product Manager of Commercial Lines and Inland Marine at AAIS, the demo was led by Bob Ridinger, Vice President of Sales and Business Development at OwlSurance, and Anand Rajaraman, Vice President of Product Management at OwlSurance.

For the third part of our blog series featuring Tapoly, the digital provider of flexible insurance products and insurance technology solutions, CEO Janthana Kaenprakhamroy offers insight to insurers on the gig economy market. Kaenprakhamroy breaks down the gig economy, how it affects insurers, and solutions for small businesses to navigate this market system.

“Check out my new drone. The camera and range are exceptional!”

“I’ve been getting out of the house more than ever with this new e-bike, have you considered getting one?”  

“Now that my solar array is complete, and I’ve connected the new 3000-watt home battery backup, I’m ready to go off-grid.”

Premium leakage is a critical issue for carriers writing personal auto insurance, particularly with the rising severity of claims. However, by utilizing data and building partnerships with auto manufacturers, data providers, and new insurtech vendors, carriers can take steps to limit exposures due to incorrect mileage and garaged locations. Join us in building a community to solve this problem.

Recent discouragement of charging electric vehicles (EVs) by officials in California in the wake of a severe heatwave prompted further research into power generation, EV charging needs and efficiencies as we move towards an “all-electric” future.

Personal lines insurance is more diverse than ever before. During a Personal Lines Product Council in 2022 hosted by AAIS, Member carriers and other key stakeholders discussed several key issues affecting the market, from cryptocurrency and solar panels to container homes, “swimply”, and e-bikes and scooters.

AAIS established Product Advisory Councils to bring Member carriers and other industry stakeholders together to identify the burgeoning issues concerning insurers and the broader insurance industry today. While not all issues raised can be solved through product or program developments, we believe discussing emerging issues as well as working together within the AAIS Community can spawn new ideas and usher resources to meet today’s challenges. A general overview of several emerging issues is discussed below.

Ransomware is a type of malicious software designed to block access to a computer system until a sum of money is paid and can target both individuals and businesses. The U.S. House Committee on Oversight and Reform shared that “in 2020, ransomware attacks on both public and private institutions in the U.S cost an estimated $19.5 billion. … in the first six months of 2021, financial institutions reported $590 million in ransomware-related transactions. Current trends indicate that ransomware transactions in 2021 alone will exceed the previous 10 years combined.”

With the holidays and the end of the year upon us, it is the time to reflect upon the past year. And it is the time of year we tend to think about coming together, as a community, to share our experiences. In our case, I’m referring to AAIS’s product-focused advisory councils.